Move to California if you can

07/19/2017By Sammy Abdullah, CFA

California has always been a magnet for venture capital. According to Dow Jones VentureSource, California attracted 45% of venture capital in 1997, 46% in 2007, and 54% in 2016. But, does this mean California is where the most successful tech companies are? After all, raising capital is not synonymous with success.

To answer the question, we looked at the headquarters of 122 publicly traded tech companies we follow in SaaS (74), social media (4), marketplaces (16), content distribution (7), gaming (4), ecommerce (11), payments (1) and new hardware (5). These are some of the most prominent names in tech with material revenue – the 74 SaaS companies have median revenue of $225mm for instance– so if you’re in this group of public companies, you’ve been a success. Below is the raw data. Summary data follows after.

RAW DATA

RAW DATA

Name

Ticker

Geography

State

Name

Ticker

Geography

State

SaaS

Social

2U

TWOU

Lanham, MD

MD

Facebook

FB

Menlo Park, CA

CA

Athenahealth, Inc.

ATHN

Watertown, MA

MA

Line Corp

LN

Tokyo, Japan

Japan

Bazaarvoice, Inc.

BV

Austin, TX

TX

Snap Inc

SNAP

Venice, CA

CA

Benefitfocus, Inc.

BNFT

Charleston, SC

SC

Twitter

TWTR

San Francisco, CA

CA

Box, Inc.

BOX

Redwood City, CA

CA

BroadSoft, Inc.

BSFT

Gaithersburg, MD

MD

Marketplaces

Castlight Health, Inc.

CSLT

San Francisco, CA

CA

Priceline

PCLN

Norwalk, CT

CT

Cornerstone OnDemand, Inc.

CSOD

Santa Monica, CA

CA

eBay

EBAY

San Jose, CA

CA

Five9, Inc.

FIVN

San Ramon, CA

CA

Sabre

SABR

Southlake, TX

TX

Hortonworks, Inc.

HDP

Santa Clara, CA

CA

TripAdvisor

TRIP

Needham, MA

MA

HubSpot, Inc.

HUBS

Cambridge, MA

MA

Shutterstock

SSTK

New York, NY

NY

LivePerson Inc.

LPSN

New York, NY

NY

Match Group

MTCH

Dallas, TX

TX

LogMeIN, Inc.

LOGM

Boston, MA

MA

IAC

IAC

New York, NY

NY

Marin Software, Inc.

MRIN

San Francisco, CA

CA

Expedia

EXPE

Bellevue, WA

WA

Medidata Solutions, Inc.

MDSO

New York, NY

NY

Trivago

TRVG

Dusseldorf, Germany

Germany

MobileIron, Inc.

MOBL

Mountain View, CA

CA

Etsy

ETSY

Brooklyn, NY

NY

New Relic, Inc.

NEWR

San Francisco, CA

CA

Lending Club

LC

San Francisco, CA

CA

Proofpoint, Inc.

PFPT

Sunnyvale, CA

CA

Angie's List

ANGI

Indianapolis, IN

IN

Qualys, Inc.

QLYS

Redwood City, CA

CA

Zillow

Z

Seattle, WA

WA

RealPage, Inc.

RP

Richardson, TX

TX

Groupon

GRPN

Chicago, IL

IL

RingCentral, Inc.

RNG

Belmont, CA

CA

GrubHub

GRUB

Chicago, IL

IL

salesforce.com, Inc.

CRM

San Francisco, CA

CA

Care.com

CRCM

Waltham, MA

MA

ServiceNow, Inc.

NOW

Santa Clara, CA

CA

Splunk, Inc.

SPLK

San Francisco, CA

CA

Content Distributors

SPS Commerce, Inc.

SPSC

Minneapolis, MN

MN

Google

GOOGL

Mountain View, CA

CA

The Ultimate Software Group, Inc.

ULTI

Weston, FL

FL

Yelp

YELP

San Francisco, CA

CA

Veeva Systems Inc.

VEEV

Pleasanton, CA

CA

TrueCar

TRUE

Santa Monica, CA

CA

Wix.com Ltd.

WIX

Telaviv, Israel

Israel

WebMD

WBMD

New York, NY

NY

WorkDay, Inc.

WDAY

Pleasanton, CA

CA

Netflix

NFLX

Los Gatos, CA

CA

Zendesk, Inc.

ZEN

San Francisco, CA

CA

Pandora

P

Oakland, CA

CA

Secureworks

SCWX

Atlanta, GA

GA

Yext?

YEXT

New York, NY

NY

Appfolio, Inc.

APPF

Goleta, CA

CA

Atlassian Corporation

TEAM

London, UK

UK

Gaming

Twilio

TWLO

San Francisco, CA

CA

Activision Blizzard

ATVI

Santa Monica, CA

CA

Instructure

INST

Salt Lake City, UT

UT

Electronic Arts

EA

Redwood City, CA

CA

Mindbody, Inc

MB

San Luis Obispo, CA

CA

Take-Two Interactive

TTWO

New York, NY

NY

Shopify

SHOP

Ottawa, ON

Ontartio

Zynga

ZNGA

San Francisco, CA

CA

Xactly

XTLY

San Jose, CA

CA

Nutanix

NTNX

San Jose, CA

CA

Ecommerce

Apptio

APTI

Bellevue, WA

WA

Amazon

AMZN

Seattle, WA

WA

Blackline

BL

Los Angeles, CA

CA

Alibaba

BABA

Hangzhou, China

China

Coupa Software

COUP

San Mateo, CA

CA

1-800 Flowers.com, Inc.

FLWS

Carle Place, NY

NY

Okta

OKTA

San Francisco, CA

CA

Shutterfly

SFLY

Redwood City, CA

CA

Alarm.com

ALRM

Tyson, VA

VA

QVC Group

QVCA

Englewood, CO

CO

Alteryx Inc

AYX

Irvine, CA

CA

Wayfair, Inc.

W

Boston, MA

MA

Amber Road

AMBR

East Rutherford, NJ

NJ

PetMed Express, Inc.

PETS

Delray Beach, FL

FL

Appian Corporation

APPN

Reston, VA

VA

Overstock.com, Inc.

OSTK

Midvale, UT

UT

Blackbaud

BLKB

Charleston, SC

SC

U.S. Auto Parts Network, Inc.

PRTS

Carson, CA

CA

Callidus Software

CALD

Dublin, CA

CA

HSN, Inc.

HSNI

St. Petersburg, FL

FL

Channel Advisors

ECOM

Morrisville, NC

NC

LightInTheBox Holding Co., Ltd.

LITB

Beijing, China

China

Cloudera

CLDR

Palo Alto, CA

CA

Covisint

COVS

Southfield, MI

MI

Payments

Ebix

EBIX

Johns Creek, GA

GA

Square

SQ

San Francisco, CA

CA

Ellie Mae

ELLI

Pleasanton, CA

CA

Everbridge Inc

EVBG

Burlington, MA

MA

New Hardware

FireEye

FEYE

Milpitas, CA

CA

TiVo Corporation

TIVO

San Carlos, CA

CA

HealthStream

HSTM

Nashville, TN

TN

Garmin Ltd

GRMN

Schaffhausen, Switzerland

Switzerland

J2 Global

JCOM

Los Angeles, CA

CA

GoPro

GPRO

San Mateo, CA

CA

Kinaxis

KXS.TO

Ottawa, ON

Ontario

Fitbit

FIT

San Francisco, CA

CA

Medidata Solutions

MDSO

New York, NY

NY

Apple

AAPL

Cupertino, CA

CA

Mimecast

MIME

London, UK

UK

Mulesoft

MULE

San Francisco, CA

CA

NantHealth

NH

Culver City, CA

CA

Paycom Software

PAYC

Oklahoma City, OK

OK

Paylocity Holding

PCTY

Arlington Heights, IL

IL

Q2 Holdings

QTWO

Austin, TX

TX

Tabula Rasa Healthcare

TRHC

Moorestown, NJ

NJ

Talend

TLND

Suresnes, France

France

Tangoe

TNGO

Orange, CT

CT

The Trade Desk

TTD

Ventura, CA

CA

Upland Software

UPLD

Austin, TX

TX

Workiva

WK

Ames, IA

IA

Yext

YEXT

New York, NY

NY

Zix

ZIXI

Dallas, TX

TX

SUMMARY DATA

State

Companies

Concentration

CA

54

44%

China

2

2%

CO

1

1%

CT

2

2%

FL

3

2%

France

1

1%

GA

2

2%

Germany

1

1%

IA

1

1%

IL

3

2%

IN

1

1%

Israel

1

1%

Japan

1

1%

MA

7

6%

MD

2

2%

MI

1

1%

MN

1

1%

NC

1

1%

NJ

2

2%

NY

11

9%

OK

1

1%

Ontario

1

1%

Ontartio

1

1%

SC

2

2%

Switzerland

1

1%

TN

1

1%

TX

7

6%

UK

2

2%

UT

2

2%

VA

2

2%

WA

4

3%

Key observations are below:

-Of the 122 companies, 54 of them are in California (44%). The next largest concentration is in New York City (11 companies for 9%), followed by Texas and Massachusetts (6% each). California is definitely where a majority of the most successful tech companies are and is almost 4x larger than the #2.

-Oddly, the marketplaces and ecommerce segments of our dataset do not show a concentration to California or any other state. Only 2 of the 14 marketplace companies are in California. Only 1 of the 11 ecommerce companies is in California. It’s not clear to us why these two segments aren't as concentrated to California.

In conclusion, VC money has been flowing to California for decades and almost half of the successful tech companies we follow are based there. Whether it’s the capital, the culture of the Valley, the preponderance of developers/engineers, or there is just something in the water, it’s easy to believe that being in California does improve the odds of success. Get there if you can.